COMMISSIONER OF INCOME-TAX, WEST BENGAL, CALCUTTA vs. SMT. ANUSUYA DEVI

CIVIL APPEAL No. 2457/1966Supreme Court[1968] 2 S.C.R. 46628 November 1967Bench: 2 JudgesAuthor: J.C. SHAH, V. RAMASWAMI OF INCOME10 pages
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What were the facts?

The assessee, Smt. Anusuya Devi, encashed high denomination notes worth Rs. 5,84,000 in January 1946. Her deceased husband's estate was assessed for the assessment year 1945-46. The assessee claimed the Rs. 5,84,000 was accumulated from gifts and savings by her husband over 30 years, found after his death, and thus not taxable income for the previous year. The Income-tax Officer taxed this amount as income from an undisclosed source for the year 1944-45, which was upheld by the Appellate Assistant Commissioner and the Income-tax Appellate Tribunal. The assessee applied to the Tribunal under Section 66(1) to state a case to the High Court, asserting 494 notes were received from a bank in Calcutta in September 1945 against a cheque for Rs. 4,94,000. The Tribunal rejected this application, noting the discrepancy with the earlier statement and that this point was not raised during the appeal hearing. The High Court, under Section 66(2), directed the Tribunal to state a case on whether it erred by ignoring this statement about the bank withdrawal.

What did the Supreme Court hold?

The Supreme Court held that the High Court erred in directing the Tribunal to state a case on a question that did not arise from the Tribunal's order. The statement regarding the receipt of 494 currency notes from the bank was not before the Tribunal, Income-tax Officer, or Appellate Assistant Commissioner; it was raised for the first time in the Section 66(1) application. Therefore, the Tribunal's order was not vitiated by ignoring this evidence. The plea of want of opportunity was also not raised before the Tribunal, so it could not be assailed before the High Court. The Court reiterated that a High Court hearing a reference must consider whether the question arises from the Tribunal's order and cannot direct a reference on a question not raised before the Tribunal. The power to reframe a question or call for a supplementary statement is limited to clarifying obscurity or pinpointing the real issue, not reopening factual inquiries. The Tribunal was not in error in failing to state a case on whether the Rs. 5,84,000 was taxable in the accounting year 1944-45, as this question was considered and rejected by lower authorities, and no argument was raised before the Tribunal on this specific point. The appeal was allowed, and the High Court's order was set aside.

What were the issues?

1. Whether the Tribunal erred in law by basing its decision on a part of the evidence, ignoring the statement regarding the withdrawal of Rs. 4,94,000 via 494 notes from the bank? (Mixed law and fact, relating to Section 66(1) and 66(2) of the Income-tax Act, 1922). Assessee's contentions (as presented to the High Court and implicitly argued): The Tribunal ignored crucial evidence (the bank withdrawal statement) and failed to give the assessee an opportunity to clarify discrepancies in her statements. The High Court, under Section 66(2), has the power to direct the Tribunal to state a case on such issues. Revenue's contentions (as presented to the Supreme Court): The statement regarding the bank withdrawal was not made before the Income-tax Officer, Appellate Assistant Commissioner, or the Tribunal during the appeal. It was raised for the first time in the Section 66(1) application. The plea of want of opportunity was not raised before the Tribunal. The High Court erred in directing a reference on a question not arising from the Tribunal's order and in reframing questions or calling for supplementary statements to reopen factual inquiries.

Which sections of the Income-tax Act were involved?

Section 66(1),Section 66(2)

AI-generated summary — verify with the full judgment below

COMMISSIO~ER OF INCOME-TAX, CALCUTI'A WEST BENGAL, • v. SMT. ANUSUY A DEVI Nol'ember 28. 1967 [J. C. SHAH Al'[) V. RAMASWAMI, JJ.] illco111e-1ax Act (II of 1922), s. 66(1), (2) and (4)--Question nor 1aiscd before 1'rihuntJl either in appeal or applicalion to state a case-If Jligh Court can direct reference on such question-If High Court must r.nsk'('f quc~tion referred-Power to rejran1c question and call for addi- tional state1nen1 fro1n Tribunal when to be exercised.

The hu,band of Ihe respondent died in October 1944. For the assess- nlcnt year 1945-46, his cstat·~ v.·as assessed to income-tax on a tot.al income of Rs. 22, I 60. In January I 946, the respondent encashed 584 high denomination notes of the value of Rs. 5,84,000. There were proceed- ings for rc-as~sment of the total income of the asses.see, wherein it wa" stated before the Income-lax Officer, on behalf of the respondent, thal during the previous 30 years, her husband was giving gifts to the respon- dent and was also setting apan money exclusively for her and their children aod, that the fund so accumulated amounting to Rs. 5,84,000 remained in a cupboard and was found after bis death, and therefo

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